The 870 level on the SPX also held firm with sharp rebounds during intra-day probes of this level. The market is waiting for the earnings season, and if early signs are any indicator, corporate America seems set to please the Bulls.

Meredith Whitney moves the Market
Over the past year and a half, former Oppenheimer & Co analyst Meredith Whitney has been moving the market down with her bearish calls on the financial sector. However, this Monday, she came out with a bullish call on Goldman Sachs and a not so bearish view on the rest of the banking sector. This triggered a strong rally in the banking sector, which was aided by Goldman’s blowout results on Tuesday morning. General wisdom suggests that the overall market cannot move up without the financials leading the way, and the healthy action in financial stock is music to the Bulls.

Intel Blows through Estimates

After the close of the market Intel announced its earnings which beat Wall Street estimates by a mile. To add fuel to the fire, their outlook for the next quarter was significantly better than the average street estimate. The markets have responded very favorably to these moves, with the Nasdaq100 futures (NQ) up more than 1.6% after hours.
Intel is attributing the strong performance to renewed growth in emerging markets, especially China. Since Intel’s chips power almost all computers sold today, Intel’s rosy forecast is seen as a sign of improving health for the entire semiconductor and technology sector.

package has been focused on turbo-charging internal demand via very loose purse-strings. The total amount of lending in the first four months of 2009 has exceeded the total amount lent in 2008. Incentives to purchase new automobiles have led to a 35% surge in sales, to an annualized rate which may beat the US new auto sales figures. It seems that Intel is now seeing the impact of the massive spending binge and factoring that into its forecast.

of Chinese stimulus. It is not obvious whether this mismatch stretches to other segments of the market. However, Intel’s forecast is likely to result in a thorough review of Wall Street’s existing view of the impact of Chinese stimulus. I definitely expect upward revisions of earnings estimates for other players in the technology sector; with some spillover to industrials and materials.

Liquidity driven Rally to Continue

Intel’s results and the market reaction to it suggest that pronouncement of Jeremy Grantham of a massive rally are likely to come true. Grantham believes that the massive coordinated stimulus injected into

the financial system will create a liquidity driven rally. There is already some speculation that a significant amount of the Chinese stimulus has found its way into financial markets and is the driving force behind the meteoric recovery of equity prices in China. The bullish spring run in crude oil too is being attributed to excess liquidity finding a home in commodities.

The US consumer will be weighed down by high unemployment, a lack of available credit and high taxes. China will have to engineer a massive shift towards domestic consumption from its export led growth model. The problem there is that the Chinese are habitual savers, and are unlikely to go into a spending binge when the collapse in exports is resulting in millions of lost jobs.

Grantham’s thesis that the global stimuli will do more to spruce up equity markets, with a little lasting impact on the underlying economic fundamentals.

Investment Plan

The SPX corrected almost 10% from its early June highs and held the key 875 level on a closing basis. Though many market technicians are pointing to a well formed Head and Shoulder pattern which suggests a downward move towards the low 800s,

Assuming that other technology heavy weights come out with strong earnings, I expect the tech sector to lead a rally in equities, which will test the recent highs. A clean break above the recent highs would put 1000, a key psychological level in play.

However, any bullish bias has to be tempered with the knowledge that the underlying economic situation remains precarious. This rally is going to be driven by high expectations which may or may not materialize. The key as always, but more so now, will be to observe the animal spirits: how equities react to news both good and bad. In a bullish tape, all news is bought; in a bearish tape, even good news is sold.

Vinaydh of http://thinkingtrades.com/claims he is an engineering graduate from IIT Delhi, India. He is charing subscription fees of $99/Monthly , $249/Quarterly , $799/Yearly .

Someone with tony123 nickname has been falsely advertising his tracking records.

It is obvious that thinkingtrades.com was completely wrong about this rally during March and April and that the only time he made money was with his model portfolio.

Vinaydh posted his record of model portfolio only. He kept deleting my postings of his wrong forcasts during those months, and blocked my postings.

He is violating numerous laws concerning investment advisory services. I'd like request IIT Bombay contacts him to find whether he is an graduate from the school, and advise him to stop wrongdoings.

Sincerely,

attachment:Track record from 06/05/09 – 06/26/09

Time to get out of longsApril 19, 2009 at 7:54 pmby vinaydhView comments

The correction has begunApril 20, 2009 at 8:47 pmby vinaydhView comments0 CommentsThe long awaited correction is finally here. I am looking for a minimum pull back to the 770-780 level.

April 30, 2009 at 9:34 pmby vinaydhView comments1 CommentI am short at present

Short term top is near or is inMarch 15, 2009 at 7:54 pmby vinaydhMarket is on a missionMarch 17, 2009 at 10:15 pmby vinaydhView commentsThis market is on a mission to achieve all its upside targets quickly.I think that the market wants to go around its 50ma at 806.

Runaway rallyMarch 23, 2009 at 9:56 pmby vinaydhView commentsThis market never fails to surprise. Whatever the excuse behind the rally, it was impressive.But I don’t think now is the time to chase this rally.

Market finally looks tiredMarch 29, 2009 at 5:54 pmby vinaydhBut the longer term trend still firmly down, there is more risk to the downside.View comments

Something’s not rightMarch 31, 2009 at 9:07 pmby vinaydhI think this market may be setting up for a much steeper fall.

ss2105066

Indian Institute of Technology Bombay,

Vinaydh of http://thinkingtrades.com/claims he is an engineering graduate from IIT Delhi, India. He is charing subscription fees of $99/Monthly , $249/Quarterly , $799/Yearly .

Someone with tony123 nickname has been falsely advertising his tracking records.

It is obvious that thinkingtrades.com was completely wrong about this rally during March and April and that the only time he made money was with his model portfolio.

Vinaydh posted his record of model portfolio only. He kept deleting my postings of his wrong forcasts during those months, and blocked my postings.

He is violating numerous laws concerning investment advisory services. I'd like request IIT Bombay contacts him to find whether he is an graduate from the school, and advise him to stop wrongdoings.

Sincerely,

attachment:Track record from 06/05/09 – 06/26/09

Time to get out of longsApril 19, 2009 at 7:54 pmby vinaydhView comments

The correction has begunApril 20, 2009 at 8:47 pmby vinaydhView comments0 CommentsThe long awaited correction is finally here. I am looking for a minimum pull back to the 770-780 level.

April 30, 2009 at 9:34 pmby vinaydhView comments1 CommentI am short at present

Short term top is near or is inMarch 15, 2009 at 7:54 pmby vinaydhMarket is on a missionMarch 17, 2009 at 10:15 pmby vinaydhView commentsThis market is on a mission to achieve all its upside targets quickly.I think that the market wants to go around its 50ma at 806.

Runaway rallyMarch 23, 2009 at 9:56 pmby vinaydhView commentsThis market never fails to surprise. Whatever the excuse behind the rally, it was impressive.But I don’t think now is the time to chase this rally.

Market finally looks tiredMarch 29, 2009 at 5:54 pmby vinaydhBut the longer term trend still firmly down, there is more risk to the downside.View comments

Something’s not rightMarch 31, 2009 at 9:07 pmby vinaydhI think this market may be setting up for a much steeper fall.